The LM curve will shift to the left if output is_____ its natural rate.
A) above
B) below
C) equal to
D) cannot be determined

Name: The LM curve will shift to the left if output is_____ its natural rate. A) above B) below C) equal to D) cannot be determined
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Question

Quizplus · Accepted Answer

The LM curve will shift to the left if output is above its natural rate because higher output increases the demand for money, leading to higher interest rates at any given level of income, assuming the money supply is constant.

The LM Curve Will Shift to the Left If Output